Investors Call Foul Play as Coinbase Parries Insider Trading Accusations

The Best Laid Plans
Shortly after Coinbase announced trading of bitcoin cash was live, its price – which had already been climbing – rocketed across all exchanges. Shortly afterwards, things swiftly went awry. Traders piled into Coinbase’s sister exchange Gdax, where BCH surged to a premium of $8,500 per coin within just four minutes. It was then that Coinbase pulled the plug, suspending trading and leaving buyers high and dry with no means of exiting before the coin corrected to levels consistent with other exchanges.

Insider Trading or Smart Strategy?
There were a few clues that Coinbase was poised to imminently add bitcoin cash. As early as Sunday, a leaked screenshot suggested that BCH markets could go live at any moment. Astute traders capitalized on this to their advantage. Those who didn’t, some might say, are simply FOMO’ing at not having bought in sooner. Nevertheless, the experience has left a bad taste in the mouth of those who bought high and then were prevented from selling at anywhere close to the price they got in at.
That’s easy to say but virtually impossible to enforce. Short of sequestering staffers, as if they were jurors in a high profile trial, there is no way of preventing word from spreading to friends and associates. Due to the size of Coinbase, any cryptocurrency added can expect a short-term boost in price – and often those gains can be substantial.Prohibits employees and contractors from trading on “material non-public information”, such as when a new asset will be added to our platform. In addition to trading restrictions, it prohibits communication of material non-public information outside the company. This includes to friends and family.

Buy On The Rumor
Coinbase isn’t the only entity to have been tried and convicted in the court of public opinion this week. A number of altcoin projects have faced similar accusations from their community. The price of cryptocurrency Einsteinium (EMC2) has soared over the past couple of weeks after its team breathlessly teased at a “mindblowing announcement”.
These words will do little to assuage disgruntled traders who are still smarting. Do you think Coinbase are to blame for today’s events? Let us know in the comments section below.I take the confidentiality of material non-public information very seriously as CEO. Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. If we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately and take appropriate legal action.
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